Sanity check - S&S ISA to SIPP

Jami74

I am not looking for financial advice, just a sanity check to see if this is a reasonable plan.

I have a S&S ISA of about £3,000 that I opened a few years ago as a first taste in investing. I haven't contributed to it recently. I am contributing to a flexible Cash ISA for short term goals.

I also have a SIPP with about £15,000 in which I am currently contributing to monthly. The hope is that this SIPP will bridge a slightly early retirement before my NHS and state pension kick in at 67.

I am 51 and a higher rate tax payer. If I contribute an extra £2,500 to my SIPP this year in addition to my usual contributions that will bring my taxable income back into basic tax rate territory (sorry for my wording, I know I've probably said it wrong).

Does it make sense to cash out the S&A ISA and put it into the SIPP rather than 'borrow' from my cash ISA savings? Is there anything I've not considered?

El_Torro

Whether you take the money from your Cash ISA or your Stocks & Shares ISA depends on how much cash you currently have and whether you are happy with this amount. If you currently are holding too much cash I would leave your S&S ISA alone and transfer it from your Cash ISA instead. 

It can make a lot of sense to move money from your ISA to your pension, especially if you are currently paying 40% income tax and when you withdraw it you will be paying 20% (or less). Remember though that ISAs are more flexible than pensions in terms of when you can withdraw from them. If you are happy not accessing this money for the next 6 years then it looks like you are making a good move.